Quest Diagnostics 2009 Annual Report Download - page 17

•Oral and Dental Related Diseases.
- Recognizing the increased attention to the connection between oral and general health, in 2009 we
acquired Oral DNA, a diagnostic laboratory company specializing in laboratory tests for oral and dental
related diseases. This provided us an offering to test for periodontal disease and strengthened our
leadership in cancer diagnostics, and enhanced our ability to offer physicians and patients increased
alternatives for personalizing diagnostic testing.
Clinical Trials Testing. We believe that we are the second largest provider of central laboratory testing
performed in connection with clinical research trials on new drugs, vaccines and certain medical devices. Clinical
research trials are required by the FDA and other international regulatory authorities to assess the safety and
efficacy of new drugs and vaccines. We see opportunities to develop pharmacogenetic and pharmacogenomic tests
to help speed drug approval processes for our clinical trials customers and, capitalizing on the trend to
personalized medicine, to better focus patient therapy based on a patient’s genetic markers. We have biomarker
capabilities that advance our efforts to develop these tests.
We have clinical trials testing centers in the United States and the United Kingdom, and we provide clinical
trials testing in Australia, China, Singapore and South America through affiliated laboratories. While we serve
most of the major pharmaceutical companies, approximately 35% of our net revenues from clinical trials testing
in 2009 represented testing for GlaxoSmithKline plc (GSK). We are the primary provider of central laboratory
testing to support GSK’s clinical trials testing requirements worldwide.
Life Insurer Services. We are the largest provider of risk assessment services to the life insurance industry
in the United States and Canada. We also provide risk assessment services for insurance companies doing
business in many countries outside the United States.
Our risk assessment services comprise underwriting support services to the life insurance industry including
teleunderwriting, specimen collection and paramedical examinations, clinical testing, medical record retrieval, case
management, motor vehicle reports, telephone inspections, prescription histories and credit checks. The clinical
tests that we perform and data we gather are designed to assist insurance companies to objectively evaluate the
mortality and morbidity risks of policy applicants. The majority of the testing is performed on specimens of life
insurance applicants, but also includes specimens of applicants for other types of insurance. Factors such as the
number of applications for underwritten life insurance policies can affect the utilization of clinical testing and
other services we provide to our insurance customers. Most of our specimen collections and paramedical
examinations are performed by our approximately 5,600 paramedical examiners at the applicant’s home or
workplace. We also offer paramedical examinations through approximately 500 of our patient service centers, and
operate approximately 80 locations other than patient service centers in the United States and Canada where we
provide paramedical examinations, bringing to approximately 580 the total number of sites where we can provide
these examinations. We also contract with third parties at over an additional 125 locations across the United
States and Canada to coordinate providing these exams.
We seek to grow our insurance revenues by increasing our market share and by offering new and innovative
clinical tests and other services. Our life insurance customers have been consolidating, which has resulted in
increased individual customer purchasing power. We expect that this trend will continue. We charge our life
insurance customers on a fee-for-service basis, typically under multi-year agreements.
Employer Services. We believe that we are the leading provider of clinical testing to employers for the
detection of employee use of drugs-of-abuse. Our Quest Diagnostics Drug Testing IndexTM, which is an annual
report of our aggregate drug testing results, is used by employers, the federal government and the media to help
identify and quantify drug abuse among the nation’s workforce.
As healthcare costs have increased, so has the value of preventative care. Employers grappling with
increased healthcare costs use wellness testing as a key tool to reduce their healthcare costs and the healthcare
risks of their employees. We provide wellness testing and analytic services to employers to enable them and their
employees to take an active role in improving their health and empower employers with aggregated health
information. Our Blueprint for WellnessTM program offers employers actionable data to power their health
improvement and cost containment programs. We are leveraging our patient service centers and paramedical
network to deliver wellness screening nationwide. We also offer Blueprint for WellnessTM directly to individuals
through our website, BlueprintForWellness.com.
Diagnostic Products, Including Point-of-care, or Near Patient, Testing. Technology advances are enabling
testing to move closer to the patient and are becoming increasingly available and reliable. Over time, some
testing that is now done in clinical laboratories will cease to be performed in clinical laboratories and will be
performed closer to the patient. We believe that our point-of-care testing strategy will strengthen our relationship
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